The UAW and Japanese Cars

January 15, 1980

BY CALLING ON the Japanese automobile companies to manufacture cars here in the United States, the United Auto Workers are taking an enlightened position. The union could have gone the other way. It could have done as the steelworkers do. The steelworkers push over the American steel companies for outsized wage increases, then join hands with those same companies to lobby here in Washington for protection against less expensive Japanese imports. But the present restrictions on steel imports are proving costly to consumers and inflationary to the whole country.

The UAW, in contrast, understands perfectly well that the Japanese manufacturers are the only serious competition these days to General Motors. It is the imports, and particularly the Japanese imports, that are holding down prices for the small cars. To keep Japanese cars out by import quotas would be extremely dangerous. To draw them in more deeply, inducting them to begin production here, would be good for everybody -- for American consumers, Japanese companies, the UAW and even General Motors.

Ideally, the future would find American companies making and selling their cars in Japan as well. Or, more precisely, it would find both countries' companies making parts of their cars here and parts there. So far, Japan has not been notably receptive to foreign companies' operating on any large scale there, although some American companies have tentatively entered partnerships with Japanese producers. But because the Japanese manufacturers have been spectacularly successful in the wide-open American market, it is now up to them to take the next step.

The Honda Motor Company announced in Tokyo last Friday -- two days before the UAW meeting opened here in Washington -- that it will begin making cars in a new plant to be built near Columbus, Ohio. The bigger companies, Nissan (which makes Datsun cars) and Toyota, are thinking about it. The UAW is calling for legislation. But it would be better for the present to hold off legal requirements to see what can be accomplished without them. Presumably, the Japanese manufacturers all perceive that to manufacture here will greatly diminish the prospect of protectionist reactions against them.

The nature of competition is changing fast in the American automobile market. Until that crucial year 1973, when the price of oil shot upward, the American companies generally chose not to fight very hard for the small car sales. But now they see that their futures depend on their small cars. Competition is fierce, and it will get fiercer over the next year or two as the American companies fill their showrooms with an increasing variety of models designed specifically to meet and exceed the imports' standards of fuel economy. The possibilities for ugly political friction are obvious. One remedy is to give American working people a stake in the Japanese companies' progress here -- just as, eventually, Japanese workers may have a stake in American companies' production for Asian markets.